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Illustration: Lazaro Gamio/Axios
It's President Trump's move now.
Why it matters: Powell's cut is the central bank's latest effort to address the U.S. economy's current bipolar state: While consumers are confident and continue to spend, the significant pullback in the manufacturing and transportation sectors show that businesses are not.
On one side: Tuesday's rock-solid U.S. consumer confidence reading was the latest sign that Americans feel good.
On the other side: Those numbers fly in the face of data on business investment that shows firms dramatically slowing down spending and delaying big projects because of the uncertainty caused by the trade war.
The big picture: "Something has got to change," Mark Zandi, chief economist at Moody's Analytics, tells Axios. "Either consumers hold tough and cheer up businesses and they resume investing again. or businesses lose faith and cause consumers to pack it in, and we go into recession."
Where it stands: As Powell mentioned during his press conference, the current cease-fire in the trade war has settled business owners somewhat, but further aggression will likely see more companies in the trade sector and other parts of the economy start to show negative effects.
The dollar rose to its highest level in more than 2 years after the Fed's rate cut Wednesday, as currency markets got a reality check about the growth prospects of the greenback against the world's other currencies.
What's happening: Strategists have been expecting the dollar to weaken for the past 2 years, yet it has remained strong against global peers like the euro, pound and yuan. After Powell's Wednesday press conference, the dollar looks poised to rise to new highs.
Why it matters: President Trump has openly complained about the strong dollar's negative impact on U.S. businesses that generate significant revenue overseas — many of which are also suffering from the trade war. Continued appreciation now seems likely and could prompt action from the White House.
What they're saying: John Doyle, vice president of dealing and trading at Tempus Inc., tells Axios that Wednesday's news conference marks a "recalibration" for investors in the currency markets.
Investors had been factoring in multiple rate cuts from the Fed in the next 12 months, but Powell reset expectations about the direction of U.S. monetary policy versus the rest of the world, Joe Manimbo, senior market analyst at Western Union Business Solutions, tells Axios.
The interest rate Americans are paying on credit cards has risen to an all-time high, pushing more people to personal loans.
The interest rate for personal loans can be more sensitive to market forces, notes Matt Carter at Credible. For the past 10 years, the interest rate on personal loans has declined, in line with overall U.S. interest rates, whereas the rate for credit cards has continued to rise.
The last time stocks performed as well as they have so far this year was 1997, but historically as the market has boomed, August has brought significant slowdowns, analysts at LPL Financial warn.
By the numbers: